WSJ Reports Investors’ Spent $1 Billion in Fraudulent Crypto Offerings
Based on an analysis conducted by the Wall Street Journal, investors have sent about $1 billion in funds to crypto projects that have been scams all along.
After having reviewed 1,450 digital coin offerings, the Journal concluded that 271 of them consisted of plagiarized documents, and a team consisting of either inexperienced or fake information. They further stated that investors have incurred a loss of over $270 million!
In general, the “Initial Coin Offering”, denoted as ICO, is a way to raise funds for a project, while giving investors a chance to purchase digital tokens at a relatively low price. Normally, how the project will be executed, and the necessary measures taken will be outlined in what’s called the “whitepaper”, allowing investors to assess the potential a project has and investing accordingly. Autonomous Next, a financial research firm, found that ICOs alone raised over $9.8 billion within a two-year time frame.
The Journal went on to state that plagiarism took place not only in relation to the team members on board, but also the whitepapers, marketing plans and technical features noted. Due to the high demand for cryptocurrencies, freelance writers are even willing to write such falsified documents for over $100.
An unbelievable example is that of Polish Banker, Jenish Mirani, who supposedly came across his picture in the Denaro project, which promotes online payments, as a co-founder under the name, “Jeremy Boker”. Based on the claims made by the Journal, the company has yet to respond to the calls made.
In several cases, the US Securities and Exchange Commission (SEC) took charge and froze assets that have been connected with fraudulent and have charged the supposed founders as well. To ensure that investors are more aware of where they are putting in money, SEC launched a website called HoweyCoins.com, which will help everyone better spot a scam over real projects.